What You Need to Know Before Starting an Airbnb

UPDATED: 
November 20, 2022
What You Need to Know Before Starting an Airbnb

More and more people have been starting their own Airbnb, and it’s easy to see why. After all, many travelers are opting to stay in an Airbnb rather than a traditional hotel or resort, so it makes sense for investors to jump on this trend and start their own Airbnb as an extra source of income. 

It may sound amazing in theory – and it absolutely can be – but you need to understand that, as with most things, starting an Airbnb isn’t necessarily as simple as it sounds. There are a few things you need to know about starting your own Airbnb, and we’re here to walk you through them.

Is it the right fit for you?

Not all investments are created equally, which means that what works for one person may not work for another, and it’s no different with Airbnb.

It may be a great investment, but you need to decide if it’s the right fit for you. As you will soon see, running an Airbnb can end up being a lot more hands-on than other types of investments, so if you prefer a more passive and low-stress income stream, it might not be the right option for you. You might be wondering: is buying an Airbnb a good investment? The truth is that you will need to do some research to see whether it aligns with what you want from an investment. 

What are the cons?

Let’s start by discussing a few of the downsides of owning an Airbnb. As mentioned above, it can often be a more hands-on experience. This is because people who decide to rent out an Airbnb often have higher expectations. After all, for many people, living in an Airbnb is part of their holiday, so they may expect things like wi-fi, snacks, and drinks. They will also likely expect you to answer all their questions soon after they have asked them, so you need to be available to assist them.

Of course, you will also not have the security of a long-term rental, which means there may be long periods when your Airbnb is empty, and there is also the fact that you will be responsible for property maintenance

What are the pros?

We know we’ve just discussed some of the cons of owning an Airbnb, but don’t let that put you off, as starting an Airbnb often has many pros as well. 

If you are worried about the management side of things as well as client satisfaction, you can hire a third party to handle the admin and logistics. 

Another benefit of an Airbnb is that, since these properties are often marketed towards people on vacation, you may be able to ask a higher price per night, especially if you offer any extras. 

What skills do you need?

Unless you will be working through a company, you will likely need to communicate with clients directly, so you need to be sure that you have the necessary skills to deal with people, especially if they are upset or have complaints. 

You will also need to work very carefully with your money to ensure that you don’t spend too much and that you earn enough. An Airbnb is essentially a business, so if you have the skills of an entrepreneur, you should be able to run it successfully. 

How important is the location?

You may think that, as long as your Airbnb is clean and a pleasant place to live, that’s all that matters. And while these things do, of course, matter, you also need to keep in mind that the location plays a big role. 

You should consider investing in an Airbnb in one of the more popular travel destinations. And if your Airbnb is close to popular tourist attractions, it will likely be in higher demand, so you will have more clients and be able to charge more. 

In conclusion 

Starting an Airbnb can be more complicated than it appears, and it’s certainly not a decision to rush into, nor is it the right decision for everyone. 

However, if you think that it’s a good fit for you and you’re willing to spend some time, effort, and money on making it a success, it could end up being an amazing investment opportunity. Of course, you can also speak to professionals such as financial advisors to get their advice, and you should seriously consider hiring a lawyer to help you with the legal side of things. Starting a new business venture can be a terrifying thought, but if it’s something you want, you shouldn’t let fear hold you back. 

Author

  • Chuck is Score LA’s Executive Director of Events and Marketing. He aims to help business owners and would-be entrepreneurs in Los Angeles improve their business practices.

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